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NOTES PAYABLE AND LONG-TERM DEBT | 12 Months Ended
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Dec. 31, 2012
NOTES PAYABLE AND LONG-TERM DEBT |
NOTES PAYABLE AND LONG-TERM DEBT | 6. NOTES PAYABLE AND LONG-TERM DEBT At December 31, 2012 and 2011, notes payable and long-term debt consisted of the following (in millions):
|  | 2012 |  | 2011 |
Term Loans: |  |  |  |  |
5.79%, payable through 2020 |  | $ | 52.5 |  | $ | 59.5 |
3.66%, payable through 2023 |  | 77.5 |  | — |
4.16%, payable through 2027 |  | 55.0 |  | — |
4.31%, payable through 2032 |  | 37.5 |  | — |
Title XI Bonds: |  |  |  |  |
5.34%, payable through 2028 |  | 35.2 |  | 37.4 |
5.27%, payable through 2029 |  | 37.4 |  | 39.6 |
Revolving Credit loans (1.69% for 2012 and 1.29% for 2011) |  | 24.0 |  | 61.0 |
|  | 319.1 |  | 197.5 |
Less current portion |  | (16.4 | ) | (17.5 | )
Total long-term debt |  | $ | 302.7 |  | $ | 180.0 |
Long-term Debt Maturities: At December 31, 2012, debt maturities during the next five years and thereafter are as follows (in millions):
2013 |  | $ | 16.4 |
2014 |  | 30.4 |
2015 |  | 20.5 |
2016 |  | 20.5 |
2017 |  | 28.2 |
Thereafter |  | 203.1 |
Total |  | $ | 319.1 |
In September 2003, the Company issued $55.0 million in U.S. Government guaranteed ship finance bonds (Title XI) to partially finance the delivery of the MV Manukai. The secured bonds have a final maturity in September 2028 with a coupon of 5.34%. The bonds are amortized by fifty semi-annual payments of $1.1 million plus interest. In August 2004, the Company issued $55.0 million of U.S. Government guaranteed ship finance bonds (Title XI) to partially finance the delivery of the MV Maunawili. The secured bonds have a final maturity in July 2029, with a coupon of 5.27%. The bonds are amortized by fifty semi-annual payments of $1.1 million plus interest. In May 2005, the Company partially financed the delivery of the MV Manulani with $105.0 million of Series B Notes with a coupon of 4.79% and a 15-year term. The Company negotiated the release of the MV Manulani as security for existing long-term debt of $56.0 million as part of the Company’s debt restructuring completed during the second quarter of 2012 to facilitate the Separation, resulting in an increase in rate to 5.79%. This obligation was also moved from MatNav to Matson. The notes are amortized by thirty $3.5 million semi-annual principal payments plus interest. In August 2011, the Company renewed its revolving credit facility; the renewed facility had a commitment of $125.0 million for Matson with an original expiration of August 2016. Amounts drawn under the facility accrued interest at LIBOR plus a margin based on a ratio of consolidated debt to earnings before interest, taxes, depreciation and amortization pricing grid. The agreement contained certain restrictive covenants, the most significant of which requires the maintenance of minimum stockholder’s equity levels and a maximum ratio of consolidated debt to earnings before interest, depreciation, amortization and taxes. Borrowing rates ranged from 1.21% to 1.92% during 2012, 0.44% to 1.91% during 2011 and 0.49% to 1.34% during 2010. As part of Matson’s debt restructuring completed in June 2012, as part of the Separation, the outstanding balance of $72.0 million was paid off and this facility was terminated. In July 2006, the Company partially financed the delivery of the MV Maunalei by borrowing $70.0 million under a $105.0 million Senior Secured Reducing Revolving Credit Facility. There were no borrowings from this credit facility during 2011 and 2010. In August, 2011, in connection with the renewal of the Company’s revolving credit facility, Matson terminated the Senior Secured Reducing Revolving Credit Facility. During the second quarter 2012, the Company entered into a new $375.0 million, five-year unsecured revolving credit facility with a syndicate of banks in order to provide additional sources of liquidity for working capital requirements or investment opportunities on a short-term as well as longer-term basis. As of December 31, 2012, the used portion of the Company’s revolving credit facility was $30.8 million, of which $24.0 million was from cash borrowings and $6.8 million was from letters of credit. During the second quarter of 2012, Matson executed new unsecured, fixed rate, amortizing long-term debt of $170.0 million which was funded in three tranches, $77.5 million at an interest rate of 3.66% maturing in 2023, $55.0 million at an interest rate of 4.16% maturing in 2027, and $37.5 million at an interest rate of 4.31% maturing in 2032. The overall weighted average coupon of the three tranches of debt is 3.97% and the overall weighted average duration of the three tranches of debt is 9.3 years. The cash received from the issuance of the three tranches of debt was partially utilized for the contribution of cash from Matson to A&B. Following the above mentioned debt financing transactions, all of Matson’s outstanding debt was unsecured, except for $72.6 million as of December 31, 2012. The debt is however guaranteed by Matson’s significant subsidiaries Total debt was $319.1 million as of December 31, 2012, compared with $197.5 million at the end of 2011. Principal negative covenants as defined in Matson’s five-year revolving credit facility (“Credit Agreement”) and long term fixed rate debt include, but are not limited to: a) The ratio of debt to consolidated EBITDA cannot exceed 3.25 to 1.00 for each fiscal four quarter period; b) the ratio of consolidated EBITDA to interest expense as of the end of any fiscal four quarter period cannot be less than 3.50 to 1.00; and c) The principal amount of priority debt at any time cannot exceed 20% of consolidated tangible assets; and the principal amount of priority debt that is not Title XI priority debt at any time cannot exceed 10% of consolidated tangible assets. Priority debt, as further defined in the Credit Agreement, is all debt secured by a lien on the Company’s assets or subsidiary debt. The Company was in compliance with these covenants as of December 31, 2012.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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